Following the Central Bank of Nigeria (CBN) ban of foreign exchange sales to Bureau De Change (BDC) operators, financial experts have stated that the development will check round-tripping.
While reacting to the outcome of the July Monetary Policy Committee (MPC) meeting, the experts insisted that the apex bank decision was quite assertive and would reduce the incessant foreign exchange abuse in the country.
According to a former President, Chartered Institute of Bankers of Nigeria (CIBN), Mazi Okechukwu Unegbu, the apex bank foreign exchange restriction to BDC operators should be lauded.
“The decision to withhold foreign exchange to the BDCs is a good one, so as to stop further abuse.
“The BDCs in our country have become conduits for laundering money in recent times which is certainly a drawback to the economy,” Unegbu said.
He noted that no monetary authorities would tolerate the racketeering that occurs in the BDCs and would not effect any change.
Unegbu added that authorising commercial banks to sell foreign exchange was profound because they were more reliable and easier to manage.
“Unlike the BDC operators who are not structured like banks, their population has grown exponentially to over 4,000.
“The large population makes its quite challenging to manage and track nefarious members, which justifies its outright ban,” he said.
Also speaking, President Progressive Shareholders Association of Nigeria, Mr Boniface Okezie, said the apex bank’s action of withholding foreign exchange to the BDCs was laudable.
Okezie, however, said that the apex bank would have punished erring operators instead of a total ban.
“Although it will have been better if the CBN punishes some of the guilty BDC operators rather than total discontinuation of dollar sales to them.
He noted that some of the BDC operators were quite honest and keep to the roles of the regulator while engaging in their businesses.
What Emefiele said
The CBN Governor, Mr Godwin Emefiele, said the BDC operators had abandoned the objectives of their establishment, which is to serve the retail end-users who needed 5,000 dollars or less.
Emefiele said they had become wholesale dealers and illegally transacted FX to the tune of millions of dollars per transaction.
The CBN said that given the rent-seeking behaviour of the BDCs, the MPC decided with immediate effect to discontinue the sale of FX to the BDCs and allow the CBN to no longer process or issue new licences for BDC operations in the country.
The members voted to channel a significant portion of weekly allocations of BDC allocations to the commercial banks to meet legitimate FX demands.
They also instructed all commercial banks in the country to create a dedicated teller point in designated branches for the sale of FX for legitimate transactions.